Should You Buy TSM While It's Under $400?

• TSMC’s accelerating AI request has improved semipermanent visibility for its foundry business.

• The institution is expanding its CoWoS packaging capacity.

• TSMC tin proceed to witnesser adjacent much stock terms gains successful 2026.

• 10 stocks we similar amended than Taiwan Semiconductor Manufacturing ›

Taiwan Semiconductor Manufacturing's (NYSE: TSM) shares are already up by implicit 40% successful 2025, but respective Wall Street analysts judge that the rally whitethorn not beryllium over. The astir bullish among them is Susquehanna expert Mehdi Hosseini, who accrued TSMC's terms people from $300 to $400 up of its third-quarter net results. Hosseini highlighted the captious relation of TSMC's precocious process nodes and unmatched manufacturing standard successful enabling advances successful artificial quality (AI) compute.

Here's wherefore a $400 terms people seems plausible successful 2026.

TSMC is experiencing accelerated request for AI-optimized chips, with rising requests for foundry capableness not lone from customers but besides from customers' customers to enactment their businesses. TSMC expects AI accelerator request to turn astatine a mid-40%s compound yearly maturation complaint done 2029 and believes existent request could adjacent transcend this forecast.

With token usage (a metric of AI computational power) crossed AI models expanding astatine an exponential rate, the request for high-performance, energy-efficient chips has surged. That inclination has benefited TSMC, arsenic precocious nodes (7-nanometer and below) accounted for 74% of its wafer revenues successful the 3rd quarter.

This request is already translating into robust top-line and bottom-line growth. In the 3rd quarter, TSMC's revenues soared 41% twelvemonth implicit twelvemonth to $33.1 billion, portion net per stock surged 50% to $2.91.

TSMC is besides focused connected expanding its chip-on-wafer-on-substrate (CoWoS) packaging capacity, which is utilized to integrate logic and high-bandwidth representation connected AI accelerators. In fact, according to manufacture estimates, TSMC volition exit calendar twelvemonth 2026 with CoWoS capableness of 120,000 to 130,000 wafers per month, a melodramatic betterment from the existent CoWoS capableness of 75,000 to 80,000 wafers per month.

TSMC expects measurement accumulation of its N2P (extension of 2-nanometer family) and A16 technologies to commence successful 2026, which could trigger different multiyear upgrade rhythm successful information centers, smartphones, and AI accelerators.

Considering each of these factors, TSMC seems good positioned to spot meaningful stock terms maturation successful the coming year.

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